There has been yet more fear mongering in the legal press as small law firms anticipate the entry of ABSs into the legal market from next year. According to a recent study, almost 90% of lawyers in the small high street law firms surveyed fear for their future in the context of the coming changes.
High Street Law Firms Can Prosper Post-Legal Services Act
For our part, we hope to be slightly less sensational – and a touch more optimistic – about the future for firms in this bracket. Firms can survive and prosper, but only by concentrating on their core competencies and excelling in financial management and business development.
“Do nothing” is definitely not an option
Whilst we do feel that the landscape for small and medium sized law firms in a post Legal Services Act world will look very different, and not a little challenging, such firms are also presented with a tremendous opportunity to play to their strengths and concentrate on what they have always been good at – providing quality advice and an excellent service, at a fair price.
As the study rightly points out, most purchasers of legal services are looking for excellent technical advice and an ‘approachable’ service. This places them firmly in the category of ‘clients’ seeking the counsel of a ‘trusted advisor’, rather than ‘consumers’ seeking to purchase ‘commodities’ based on price alone.
No Rest for the Good
However, there is no excuse for firms to rest on their laurels – those that do will quickly find themselves undone. Good firms, staffed by outstanding lawyers who pride themselves on the trusting relationships they build, can continue to succeed. But these conditions are necessary; they are no longer sufficient.
Firms wanting to prosper need to be clear about their target market, their offering to that market, how they will position themselves and how they will price their services. An up to date database is crucial, as is making regular contact with clients and prospects. All communications must form part of a coherent marketing strategy, in line with the firm’s target market and positioning.
Focus on Law Firm Finances
A clear direction in strategy and business development needs to be complemented by a similarly focused approach to financial management. Even in the smallest of firms, there is no excuse for the law firm management not to be kept up to date with comprehensive, comprehensible management information. Cash flow must be first priority, to be coupled with a strong approach to profit and loss and a sensible balance sheet structure.
For those small law firms with a clear strategy and a roadmap to achieving the partners’ goals, the future could well remain bright. Those lacking the capabilities in-house would be well advised to look outside the firm for quality advice and service at a fair price – much as their clients will continue to do.